TECH Bits: Microsoft’s Mojang Deal A Bet On Community Building?

Lots of eyebrows shot upward this week on the news that Microsoft would spend $2.5 billion to buy Mojang, a little Swedish company that happens to be behind the big game franchise Minecraft. And maybe they should have.

Digi-Capital‘s analysis of the deal suggests Microsoft spent at least twice as much for Mojang compared with other one-hit-wonder game companies. Just take a peek at their chart showing ratios of price to sales, and price to profits, for Mojang and some competitors.Mojang-Microsoft-valuation-chart

And, Digi-Capital observed, having Minecraft on Microsoft’s mobile devices, tablets, game consoles and Windows-based PCs might pull a few customers in for the hardware, but not $2.5 billion worth of hardware.

The straight business prospects are further complicated because Minecraft uses a throwback business model: you pay several bucks up front to buy it on a platform and you’re done. By contrast, most of the hot mobile games these days (think Angry Birds, Candy Crush and the like) are free-to-play. That means you pay nothing up front, but if you want to advance in any substantial way, you’ll need to buy lots of little add-ons with in-app purchases.

Tim Merel photoBut the deal could still be a smart one for Microsoft’s long-term health, because the company may be focused more on the Minecraft community of millions of players than on the deal’s short-term potential, says Digi-Capital managing director Tim Merel. Microsoft mentioned “community” six times in its news release announcing the deal.

“In that context, acquiring the Minecraft community is a bold long term strategic move for Microsoft’s future cloud, mobile, virtual reality and wearables platforms,” Merel says. “Its impact will depend on their ability to nurture that community and migrate them to future platforms. Keep users happy and Mojang could be a great deal. Upset them, and the building blocks might fall away.”

Roku Passes 10 Million Boxes Sold

Image (1) Roku-logo__120726162852-200x110.jpg for post 307460Roku said it has passed the 10 million mark in U.S. sales of its video-streaming devices, a major landmark for the small electronics maker. The devices make it easy to stream video programming through apps from companies such as Hulu, Netflix and many dozens of other content providers. The latest landmark is particularly notable because the company said in January that it had passed 8 million units sold.

Roku, which led all competitors in U.S. sales last year, still has a ways to go to catch up with Apple’s little “hobby,” the Apple TV, which has sold a reported 20 million worldwide and certainly benefits from Apple’s marketing reach and network of  retail outlets. But the increasing availability of thousands of hours of so-called “over-the-top” video programming from many providers is making inexpensive devices like those made by Roku increasingly attractive to a group of consumers.

Mail.Ru Buys Rest Of VKontakte, Controls Russian Social Media

VKontakte logoVKontakte, the top Russian social-media network, is now under complete control of, a Russian online giant that previously held a bare majority stake. The $1.5 billion cash deal for a 48-percent share of the company was financed in part by Gazprombank. With the deal, and billionaire owner Alisher Usmanov control Russia’s three largest social-media sites, including Odnoklassniki and Moi Mir.

VK has about four times as many users (comScore estimates 61 million of the country’s 146 million residents) as Facebook. The deal ends a protracted legal fight between VK’s founder and former CEO Pavel Durov and the private equity group United Capital Partners, which had bought that 48 percent stake in the company from two of Durov’s co-founders.

Just For Laughs, Maker launch comedy-classics YouTube channel

Comedy production company Just For Laughs has partnered with Disney-owned Maker Studios to launch a YouTube channel featuring archived clips of notable stand-up comedians such as Dave Chappelle, Louis CK, Jon Stewart and Tracy Morgan, along with insider favorites such as Bill Hicks, Mitch Hedberg and Bill Burr. Just For Laughs has sponsored a huge annual comedy festival for 32 years, amassing 500 hours of those performances dating back to 1987.

The channel will also feature new original programming. Just For Laughs already has a YouTube channel with Maker called Gags that has more than 4 million subscribers and 1.5 billion total views.




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